“Most tax return preparers provide honest, high-quality service,” the IRS explained. “But some may cause harm through fraud, identity theft, and other scams.
“It is important for taxpayers to understand who they’re choosing and what important questions to ask when hiring an individual or firm to prepare their tax return. Another reason to choose a tax preparer carefully is that taxpayers are ultimately legally responsible for all the information on their income tax return, regardless of who prepares it.”
What to look out for
So, what should consumers be wary of when it comes to their tax preparer? The IRS suggests these tips:
- Make sure your tax preparer has a valid Preparer Tax Identification Number (PTIN). This is a legal requirement for all preparers or assisting preparers. If the individual either doesn’t have a PTIN, or doesn’t include it in the return, that’s a red flag for consumers.
- Tax preparers must sign all tax returns upon completion – if they refuse to sign, that’s a sign that they’re likely scamming you. The IRS explained that this is what they call “ghost preparers” – people who fill out consumers’ tax returns and promise big refunds or charge large fees for big refunds.
- Similarly, ask your tax preparer for their fee beforehand. A preparer should never charge based on the estimated size of the return, or claim they can get you a bigger refund than other preparers.
- It never hurts to do extra research. The IRS has a Directory of Federal Tax Return Preparers, which was designed to help find tax preparers who currently hold professional credentials recognized by the IRS. While not all valid preparers are in the directory, taxpayers can take to the internet to get the history of any tax preparer they’re thinking of working with.
- Make sure your return is filled out in its entirety, with nothing left out or blank. If any spaces are blank, taxpayers shouldn’t sign the return. The IRS encourages taxpayers to take the time to review their return before it’s officially submitted. It’s also important to note that your refund should be linked to your bank account – never the preparer’s personal account.
- Get your proper tax documents in order. This includes W2s, 1099s, etc. Tax preparers shouldn’t ask for your pay stub and try to submit your return with that. However, they should ask questions about deductions, tax credits, income, and more.
- Find a tax preparer who works in this area year-round, as well as one who is authorized to file returns electronically. Someone who does this work all year will be able to guide you through any issues that pop up beyond the heart of tax season. Similarly, when a preparer can submit your return electronically, you’re likely to see your refund a bit faster.
What to do when there are issues
If you feel your tax preparer has led you astray, charged you incorrectly, filed your return without your consent, or had any kind of misconduct, the IRS does have some resources in place.
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